Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment, Net

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Property and Equipment, Net
 6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net Property and Equipment, Net
As of June 30, 2020 and December 31, 2019, total property and equipment, net consisted of the following:
June 30, 2020 December 31, 2019
Oil and natural gas properties, full cost accounting method (In thousands)
Evaluated properties $7,840,616    $7,203,482   
Accumulated depreciation, depletion, amortization and impairments (4,062,660)   (2,520,488)  
Net evaluated oil and natural gas properties 3,777,956    4,682,994   
Unevaluated properties
Unevaluated leasehold and seismic costs 1,596,662    1,843,725   
Capitalized interest 166,198    142,399   
Total unevaluated properties 1,762,860    1,986,124   
Total oil and natural gas properties, net $5,540,816    $6,669,118   
Other property and equipment $67,883    $67,202   
Accumulated depreciation (35,439)   (31,949)  
Other property and equipment, net $32,444    $35,253   
The Company capitalized internal costs of employee compensation and benefits, including stock-based compensation, directly associated with acquisition, exploration and development activities totaling $8.9 million and $8.4 million for the three months ended June 30, 2020 and 2019, respectively, and $16.4 million and $19.1 million for the six months ended June 30, 2020 and 2019.
The Company capitalized interest costs associated with its unproved properties totaling $20.9 million and $18.7 million for the three months ended June 30, 2020 and 2019, respectively, and $44.9 million and $38.6 million for the six months ended June 30, 2020 and 2019.
As a result of the recent downturn in the oil and gas industry as well as in the broader macroeconomic environment, the Company analyzed its unevaluated leasehold giving consideration to its updated exploration program as well as to the remaining lease term of certain unevaluated leaseholds. The Company transferred $43.9 million and $224.4 million from unevaluated leasehold to evaluated properties during the three and six months ended June 30, 2020, respectively, primarily as a result of the analysis described above.
Impairment of Evaluated Oil and Gas Properties
Primarily due to declines in the average realized prices for sales of oil on the first calendar day of each month during the trailing 12-month period (“12-Month Average Realized Price”) prior to June 30, 2020, the capitalized costs of oil and gas properties exceeded the cost center ceiling resulting in an impairment in the carrying value of evaluated oil and gas properties for the three months ended June 30, 2020. An impairment of evaluated oil and gas properties recognized in one period may not be reversed in a subsequent period even if higher oil and gas prices in the future increase the cost center ceiling applicable to the subsequent period. There were no impairments of evaluated oil and gas properties for the three months ended March 31, 2020 or for the corresponding prior year periods.
Three Months Ended June 30,
2020 2019
Impairment of evaluated oil and gas properties (in thousands) $1,276,518    $—   
Beginning of period 12-Month Average Realized Price ($/Bbl) $54.63    $54.58   
End of period 12-Month Average Realized Price ($/Bbl) $45.87    $53.00   
Percent decrease in 12-Month Average Realized Price (16  %) (3  %)
The Company expects to record an additional impairment in the carrying value of evaluated oil and gas properties in the third quarter of 2020 based on an estimated 12-Month Average Realized price of crude oil of approximately $43.45 as of September 30, 2020, which is based on the average realized price for sales of crude oil on the first calendar day of each month for the first 11 months and an estimate for the twelfth month based on a quoted forward price. Declines in the 12-Month Average Realized Price of crude oil in subsequent quarters could result in a lower present value of the estimated future net revenues from proved oil and gas reserves and may result in additional impairments of evaluated oil and gas properties.